Auto Sales Could Show Good Growth In The Near Future

Wednesday, September 21, 2011

I previously discussed why I believe the retail sales picture is positive There is one area that has yet to recover its pre-recession levels: Motor vehicles and parts. Because of that, auto sales has the potential to show good growth – perhaps in the near future.

Below is the graph showing the recession gap for motor vehicle and parts sales. Instead of being worrisome, this shortfall could be a future growth driver. Although buying an auto is considered a discretionary purchase, at some point it becomes a necessity for most consumers. Therefore, a period of slow auto sales can create a higher sales period later due to postponed or “pent-up” demand.

Article posted on SeekingAlpha.com

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